Purpose vs. Profit In The #SocialEra

by Jay Deragon on 12/20/2012

Future-of-Profit-is-Purpose_Blue-Focus-Marketing1We live and work in a intangible economy where purpose drives profit for those who understand the economic shifts brought on by the #SocialEra.

Purpose is defined as the object toward which one strives or for which something exists; an aim or a goal. The purpose of the human network is life, liberty and the pursuit of happiness. The purpose of business has been in conflict with the purpose of the human network.

Without a clear business purpose beyond maximizing profits executives are more prone to make the wrong decisions that are primarily influenced by “profit”.  Sucessful corporation that experiences exceptional long term success possess a compelling purpose beyond maximizing shareholder wealth.

Research at both Harvard and Stanford revealed a significant fact: The most successful companies, both in profitability and longevity, are the ones who recognize the absolute necessity of profits as well as the equally high necessity of having a purpose beyond shareholder wealth. However, the chasm between understanding and actual behavior is vast. The problem is the lack of understanding how an intangible, purpose, can be leveraged to produce a tangible profit.

Business Profit Comes From Fufilling Human Purpose

Purpose is a human value and business has failed to recognize the value of purpose. While people value money it isn’t considered a purpose. The values of the human network spring from intangibles while business values spring from the tangibles, profit.

Corporate and personal corruption is high. Mistrust of government and of major corporations has perhaps never been higher.  Employee loyalty is receiving horrible marks—a CareerBuilder study in 2011 shows that 75% of employees would leave their current positions without hesitation if the right opportunity came along.  Other studies show companies losing 20-50% of their staff every year. Employee engagement is clearly suffering as well.  Why? Because business has lost it’s real purpose.

Business leaders need to learn business models where making a profit doesn’t mean losing purpose, people, and connection with a marketplace looking for purpose. The #SocialEra creates those models and highlights purpose. Why? Because the #SocialEra redefines how we organize, work, produce and profit through a collaborative intangible network of value exchanges inside and outside of traditional organizational constructs.

It is a different way to think about purpose that produces profit.

{ 1 comment }

Jim Jacques January 4, 2013 at 4:38 am

Things we once considered opposing forces–doing right by people and delivering results, collaborating and keeping focus, having a social purpose and making money–are really not in opposition. They never have been. But we need a more sophisticated approach to understand business models where making a profit doesn’t mean losing purpose, community, and connection. Finding the right balance among them is key. We will find that balance as we shape new constructs for business models, strategies, and leadership. What we can create will be rich in many senses of the word.

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